His Virgin company will use a development of the SpaceShipOne craft to carry five fare-paying passengers to more than 100km.

Sir Richard, who will call his spaceline Virgin Galactic, says 7,000 people have already shown interest in buying a ticket, which will cost about US$200,000 (more than £100,000).

An annual X-Prize Cup will now take place in New Mexico, where private groups will be invited to demonstrate their space technology.

The X-Prize Foundation is also working with the World Technology Network to create a whole set of new awards. The so-called WTN X-Prizes will seek scientific or technological breakthroughs that tackle the most important challenges facing humans today.